States Lead the Way in Enforcing Campaign Finance Transparency

The federal government has done virtually nothing to enforce rules requiring political advertisers to publicly disclose who is funding their campaigns — one of the last defenses remaining against the corruptive influence of wealth in politics.

A person living in New York or California or Missouri may wonder: how can I have an impact on the huge forces that seem to control what happens — or, often, doesn’t happen — in DC? Sometimes we focus so much on the national level that we forget what we can do at the local level. Yet it’s at the local level where the foundation for national change and power is often built.

This is true even with an issue that seems as intractable and widespread as campaign finance. The federal government has done virtually nothing[4] to enforce rules requiring political advertisers to publicly disclose who is funding their campaigns — one of the last defenses remaining[5] against the corruptive influence of wealth[6] in politics. But last month, two states showed the feds how it’s done.

In Colorado, one citizen’s effort to fight anonymous advertising paid off[7] in a ruling by Administrative Law Judge Robert Spencer. Judge Spencer held that a prominent dark money group active in the 2016 election had wrongly failed to register as a political action committee subject to transparency rules —Colorado offers a rare procedure allowing anyone, not just government officials, to take campaign finance violators to court. The group, Colorado Pioneer Action, created by former Sen. Bob Beauprez (R), had instead operated as a social welfare nonprofit, also known by its tax-exemption category as a 501(c)(4) nonprofit. Social welfare nonprofits typically don’t have to disclose their donors, but their primary purpose is not supposed to be supporting or opposing a political candidate. Judge Spencer found that[8] Colorado Pioneer Action had primarily done just that[9], by providing more than $300,000 for ads attacking or supporting various candidates for state office. He ordered the group to pay a $17,000 fine.

In Missouri, the Ethics Commission fined Governor Eric Greitens’ campaign $1,000[10] for failing to disclose a contribution, in the form of a donor list, from The Mission Continues, a 501(c)4 that Greitens himself had founded with the declared purpose of helping veterans. Greitens has drawn criticism for other activities involving opaque political money. Last year, his campaign collected the largest single political contribution[11] in Missouri’s history, $1.9 million, from a federal PAC called SEALs for Truth – which told federal regulators that it had received all of its money from the American Policy Coalition, a nonprofit with no paper trail.

Recently, Greitens’ campaign treasurer founded A New Missouri Inc., a 501(c)(4) nonprofit claiming to “advocate for and promote the governor and his agenda[12].” Although Greitens has distanced himself[13] from the group, claiming no connection between the governor’s office and A New Missouri, the situation has inspired a bill mandating that nonprofits affiliated with elected officials disclose their donors, now pending[14] in the State Senate. The bill was drafted in response to attack ads[15] funded by A New Missouri, ironically criticizing Republican Senator Rob Schaaf for poor ethical conduct[16].